The Economy Debate

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Department: HM Treasury

The Economy

Harriett Baldwin Excerpts
Thursday 24th October 2019

(4 years, 5 months ago)

Commons Chamber
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Sajid Javid Portrait Sajid Javid
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I would think that, being a member of a party that is called the Labour party, the hon. Lady would understand that the best way out of poverty for anyone is a growing economy that creates jobs. Since 2010, there are over 1 million fewer workless households—a record low—there are 730,000 fewer children living in workless households, also a record low, and there are 50,000 fewer households where no member has ever worked.

Harriett Baldwin Portrait Harriett Baldwin (West Worcestershire) (Con)
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Will the Chancellor in his excellent speech also tell the House how much better off someone on low pay is, because, with the increases in the living wage and the increases in the tax-free threshold, households are taking home much more, particularly the lowest paid?

Sajid Javid Portrait Sajid Javid
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I am pleased that my hon. Friend has raised that, because it allows me to remind the House that since 2010, because of the actions that we have taken, including the rise in the minimum wage and tax cuts, the average person working full-time on the minimum wage is around £3,500 better off a year—that is because of actions we have taken.

Our relationship with the EU is a critically important factor affecting the UK economy, but it is of course not the only one. Unlike the Labour party, we will never talk down Britain’s economy. The shadow Chancellor has predicted a recession almost every year since we came into office, as he was doing just a moment ago—he does it all the time—but the underlying fundamentals of our economy are incredibly strong: nine years of growth; a healthy labour market with the lowest unemployment rate this country has seen in 45 years; low and stable inflation; and an attractive environment for foreign investment.

So I am optimistic about the future, but I am not complacent. We need to prepare our economy to seize the opportunities of leaving the EU, and that is why we are putting to the House the programme in this Queen’s Speech.

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Harriett Baldwin Portrait Harriett Baldwin (West Worcestershire) (Con)
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It is an honour to follow the hon. Member for Gedling (Vernon Coaker), who made a very powerful speech. I am proud to have been part of a Government who helped to bring in changes to tax rules and the living wage that have meant that, as the Resolution Foundation has said, we have had the biggest fall in the number of those on low pay in our economy in 40 years.

That is not what I was planning to talk about, however; I plan to talk about an industry that has not had a lot of focus over the past three and a half years. I welcome the fact that there is a financial services Bill in the Queen’s Speech. Over the past three and a half years, we have talked a lot about some very important industries. We have talked about dairy farmers and fishermen, and about the importance of car manufacturing and manufacturing generally, but we have not spent a great deal of time talking about our biggest export sector: the financial services sector. I think all of us on both sides of the House can agree that when that sector works well, it is the driver and the engine of our economy. It employs about one in 14 of all our constituents—2.3 million people, two thirds of whom are outside the M25. It pays a lot of taxes—£75 billion last year. About £1 in every £10 of public spending is funded by the financial services sector. Let me give some concrete examples. Instead of 20,000 extra police, we would be able to pay for only 18,000 extra police if those tax revenues were not there. Instead of 40 hospital expansions, we would be able to pay for only 36 if those tax revenues were not there. It is therefore a very, very important sector.

I am keen to hear from Ministers exactly what is going to be in the financial services Bill. After all, it is a sector where we have made substantial progress in terms of sound regulation. I want to know whether this Bill will be similar to the one that fell at Prorogation. I want to hear what the Government’s vision will be for regulation in this sector after we leave the EU. I see from the political declaration on the future partnership that the vision is a great deal of equivalence between the UK and EU sectors. I would be interested to hear from the Government what their vision is for how that equivalence might work. In the third declaration, only three paragraphs —paragraphs 35 to 37—cover that vision so far, so it would therefore to be good to hear Ministers elaborate on how the equivalence mechanisms might work. How will there be arbitration in terms of those equivalence mechanisms? How will there be a process of notice if one sector does not meet the equivalence criteria? How will things change when the in-flight files that currently exist in the EU in this sector have to be incorporated into UK law? What degree of manoeuvre will this place have in relation to this sector when we have left the EU? These are very important questions that we have not had enough time to debate over the past three and a half years. This sector has already seen a change in export earnings—down to £60 billion last year compared with £69 billion in 2015. It would be very valuable if, when she winds up, the BEIS Secretary could talk about how she would view this mechanism working.

The financial services sector is vital to our economy. It is vital to every single one of our constituencies and every single person who relies on financial services for their business to grow, right across the country. It would be good to hear the Government’s plan for the sector in terms of that future partnership.

None Portrait Several hon. Members rose—
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